Average Pell Grant down 13%
Wisconsin is among hardest hit
Madison.com, December 25, 2004

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The University of Wisconsin-Madison administration and students are worried that government cutbacks in the Pell Grants program will further erode the ability of the average citizen to afford a college education.

Some 2,000 UW-Madison students could lose between $250 and $300 a year in grants as a result of a new formula for Pell Grants, the federal government's primary aid program for low-income students.

That's an average of 13 percent of the value of their Pell Grants, according to Steve Van Ess, UW-Madison director of student financial services.

The national cuts are going to have a bigger impact in Wisconsin than in 43 other states, according to an analysis from the U.S. Department of Education. That's because the disposable income of families here has increased faster since 1988 than in other states, and that plays a significant role in the formula for determining the size of the grant.

The new formula will eliminate federal Pell Grant scholarships for an estimated 80,000 to 90,000 low-income students nationwide and force a modest scaling back of other types of state and federal assistance to broader categories of undergraduates.

Bush administration officials said the new formula, which is used to measure a family's ability to pay college costs, will save the government at least $300 million in the 2005-06 academic year.

The neediest students, who receive the maximum federal scholarship of $4,050, will be unaffected and only a small fraction of the 5.3 million Pell recipients will lose their grants entirely, officials said.

But a New York Times analysis found that at least 1.3 million students will get smaller Pell Grants.

An estimated 90 percent of the families receiving help through the program earn under $35,000 a year. The average grant is about $2,400 a year. Most of those expected to lose eligibility next year are families at the upper margin of eligibility who receive only the minimum grant of $400, according to Susan Aspey, spokesperson for the Department of Education.

The previous formula was a decade old and relied on 1990 data that is widely acknowledged to be out of date. The new formula uses tax data from 2002.

Congress, however, had resisted the change in a series of bills approved by both houses over the last 18 months, and education officials indicated Thursday that they were taken aback by the timing of the announcement, just two days before Christmas.

The changes will force many students to take out loans to compensate for the grants they never received.

UW-Madison Provost Peter Spear said diminishing federal grants are likely to put a greater burden on the state, if it wants to stop the trend of students from low-income families being priced out of a higher education.

The Board of Regents made increasing financial aid a priority for the upcoming biennium.

"We're concerned that the demographics of our student body don't reflect the demographics of the state," Spear said. "This will make it even worse if we don't do something to fill in the gap."

And Stephanie Hilton, president of the United Council of University of Wisconsin Students, said: "In every state across the country, tuition is going up faster than families can afford to pay for them," Hilton said. "Students are already graduating with way too much debt from college."

In a statement, Gov. Jim Doyle called it "more unwelcome news for Wisconsin families and students this holiday season."

"I urge the Bush Administration to reconsider this decision, so that families in Wisconsin and across the country can continue to have full access to Pell Grants," Doyle said.

Related Article:

Pell Grants are Sabotaged; This Can Hurt America